Money Unit to Get Over 2/3 of Portfolio

Confidence in Harvard Management Increases

The Harvard Management Company will probably continue to manage more than two-thirds of the University's portfolio even after it selects several outside firms to handle small segments of the endowment.

Last spring, when Harvard Management was set up as Harvard's inside management firm, President Walter M. Cabot '55 said that about one-third of the endowment would be divided among five to seven outside managers in $50,000 to $100,000 chunks.

However the decrease in the value of the portfolio last year from $1.35 billion to about $1.1 billion and the increasing confidence expressed in the new company by Harvard's Governing Boards means that a lower percentage will likely be farmed out.

Cabot said yesterday that he has gotten "some feedback" that the administration and members of the Governing Boards are impressed with the highly qualified staff he has hired and the job they had done thus far in setting up the company.

This feedback might be a factor in deciding to increase the percentage of the portfolio maintained internally, he said, but added that he will make no official recommendations until the November meeting of Harvard Management's Board of Directors.


Favorable Reaction

Treasurer George Putnam '49, also a member of the Corporation and a director of Harvard Management, said yesterday that President Bok and members of the Corporation have "reacted very favorably" to the performance of the company so far.

Putnam said the increased confidence in Cabot's staff and the decrease in the overall size of the portfolio will be factors in the directors' willingness to allow a higher percentage of the portfolio to remain with Harvard Management.

Harvard Management took over the entire portfolio on July 1 and will continue to manage all of it until the outside managers are named sometime early next year.

To Provide 'Yardstick'

When Putnam and members of the Corporation announced their intention to form the Harvard Management Company last fall, they decided that several modest chunks of the portfolio should remain with outside management firms as a sort of "yardstick" for the new company.